US PRESENTERS/SERVICES
US TAX WITHHOLDING (15%), T4A-NR
Because of an audit by the Canadian Revenue Agency (CRA) on May 17, 2010 we are now required to deduct withholding tax of 15% from all Individuals/Companies residing outside of Canada, if the vendor has not completed the linked R105E (08) form and received a waiver from CRA.
“Regulation 105 of the Income Tax Act requires every person (whether resident or non-resident in Canada) who pays a non-resident person (individual, corporation, partnership, joint venture, limited liability company, or other) a fee, commission, or other amount for services (of a non-employment nature) rendered in Canada, to deduct and withhold 15% tax from such a payment.”
PLEASE NOTE: THIS FORM MUST BE COMPLETED FOR EVERY OCCURANCE WHICH A COMPANY/INDIVIDUAL FROM OUTSIDE CANADA IS CONTRACTED FOR. Ex., If they are coming in November (at one location), but then again in January (for another location) they must complete the form for both dates.
I have attached the link to form#R105E (08) that the vendor must complete and send to the CRA prior to coming to Canada. Please note that the instructions on how to complete the form and what documentation the CRA Office requires is at the bottom of this form.
http://www.cra-arc.gc.ca/E/pbg/tf/r105/r105-08e.pdf
I have also included the link to a more detailed guideline related to the withholding tax. http://www.cra-arc.gc.ca/E/pub/tp/ic75-6r2/README.html
Requirements for the School Board employee hiring the Individual/Company:
1) You must ensure that the form is completed by the individual/company completing the service within the timeframe instructed on the form.
2) The invoice of the individual/company must include a detailed breakdown of what they are billing us, Ex. Inservice billing: 6hrs presentation @ $1000/day, 100 books @ $45/book, $50/day for food and incidentals.
3) When the services are complete, the detailed invoice (with approval and account information), and a copy of the CRA letter must sent to the Finance Department for payment.
Please be aware:
If the individual/company does not get the approval/denial back from CRA prior to them coming to Canada, then the board must withhold the tax and remit on their behalf. It will be calculated on the total amount of the invoice (converted to Canadian dollars) and deducted from the invoice to reduce the amount payable by the 15% withholding tax.
8/25/2015